Negotiations over Crozer Health’s future hit a snag, bankruptcy lawyer tells judge
Bankrupt Prospect Medical Holdings and officials with the Pennsylvania attorney general's office negotiated through the weekend, but were unable to reach a deal, a Prospect attorney said.

Negotiations between bankrupt hospital owner Prospect Medical Holdings and the Pennsylvania attorney general over Crozer Health’s transfer to a new nonprofit “hit a snag” over the weekend, Prospect’s lawyer told a bankruptcy judge Monday.
Prospect will be back in federal court Thursday to either ask for a 30-day extension of bankruptcy funding for Crozer or with a plan for shutting down the Delaware County hospitals, Prospect’s lawyer, Thomas R. Califano, of Sidley Austin, told the judge.
“I really hope it’s not the agreed shutdown,” he said. Califano said Prospect and the Pennsylvania attorney general’s office worked over the weekend. He did not say what the snag was.
On Friday, Prospect put out a news release saying it had reached a deal to transfer Crozer Health to a “not-for-profit consortium of health-care operators” with state support, even though no agreement had been reached.
The for-profit company based in California also filed a motion for approval of the transaction, but didn’t include a sale agreement, as is customary. A hearing was scheduled for Thursday.
At an unrelated Prospect hearing Monday, U.S. Bankruptcy Judge Stacey Jernigan asked Prospect lawyers when the sale agreement and other documents would be filed. “Are we going to be getting those soon so that we have proper time to evaluate the substance?” she asked.
That question prompted Califano to say: “That’s hit a bit of a snag.”
Neither Prospect nor the Pennsylvania attorney general’s office responded immediately when asked what an “agreed shutdown” would look like.
At the first hearing in Prospect’s bankruptcy case on Jan. 14, Califano mentioned the possibly that Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park would be closed if they couldn’t be quickly transferred to a new operator.
The AG and the administration of Gov. Josh Shapiro have been pushing a plan that would put Crozer under state control with a temporary manager, known as a receiver, running the hospitals. After the hospitals are financially stabilized, they would then be transferred to a new nonprofit.
The state has been working for more than a year to preserve Crozer, which is Delaware County’s largest health system and serves a low-income area without easy access to other health-care options. Prospect previously closed two other Crozer hospitals in Springfield and Drexel Hill.
Jernigan said Monday that she expected everyone involved to do everything possible to keep the hospitals open.
“No pressure, but I’m expecting people to pull a rabbit out of the hat and somehow make that happen,” she said.